This course provides a comprehensive summary of the markets together with the techniques and range of trading instruments that are typically employed. The primary focus is the identification and management of the wide variety of risks that arise from the trading activity. The purpose is to enable delegates to design, critique and implement a control and monitoring regime within their own trading organisation; information from which could be utilised to report to senior management. Case studies are used to learn the techniques involved, which will be reinforced in syndicate groups where risk arising from a portfolio of positions is assessed.
Case studies will address each technique used in the management of risk. A continuous theme case study will also allow each syndicate to manage a portfolio of their own group positions. It is recommended that delegates should have attended TR1 or have a reasonable working knowledge of the subjects covered in that course.
The course commences with a recap of the markets and trading techniques, the instruments used, and the methodology of trading oil and derivatives. Within each trading area the risks are identified and available management tools are discussed in detail. The theory and mechanics of advanced instruments including swaps, CFDs, traded and OTC option are explained and the application of VaR in assessing a variety of risk is discussed in detail. Along with price risk, other areas of exposure will be addressed such as counterparty, credit exposure, trading limits and mark to market in-house position management.
Overall delegates are trained in the concept of identification, management and reporting of the total risk confronting their trading group.
Case studies will address each technique used in the management of risk. A continuous theme case study will also allow each syndicate to manage a portfolio of their own group positions.
Please note: a laptop and up-to-date version of Office would be an advantage in order to engage in market data; however it is not essential.
What you will learn
- The oil trading markets covering physicals, forwards, futures, swaps and traded
and OTC options
- How to assess and monitor credit lines and use VAR in assessing a variety of risks
- Trading methodology as it relates to the identification and management of price risk
- How to structure credit and counterparty risks and implement a credit
management programme
- Operational and market risks
- Futures, traded options, OTC swaps and options
- How to monitor and confirm trading positions and calculate P&L by marking
to market
- Freight risk management
- Use the forward and futures markets to manage price risk including the use of EFPs
- Application of Value-at-Risk techniques to assess trading exposure and position limits
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